The Committee's report warns there may not be enough providers willing to provide the additional 15 hours of free childcare being introduced by the Government in 2017.
It also finds the Department for Education does not have robust plans to ensure there are sufficient qualified early years staff "so that providers can continue to offer high quality childcare".
While "significant progress" has been made towards ensuring all three and four-year-olds benefit from 15 hours of free early education and childcare, take-up for disadvantaged two-year-olds has been significantly lower.
Insufficient data to measure impact of free childcare
The Committee highlights "unacceptable variations" in the amount of information available to parents about access to free childcare, as well as concerns that some providers offer the free entitlement only on condition that parents pay for additional hours.
It concludes the Department "lacks sufficient data to measure the impact of free childcare" and urges it to report back by September "on how it will measure the value for money of the current and new entitlement".
Pilot scheme should be used "to test providers' capacity to meet the expected demand"
The Committee says the Department should use pilots of the new entitlement, which start in September this year, "to test providers' capacity to meet the expected demand…and assess how feasible it is for providers to operate with the new funding rates".
It should set out to the Committee how it plans to evaluate these pilots and implement any changes required before the full rollout in September 2017.
The Department should also take steps to ensure councils provide "sufficient accessible information" to parents about their entitlement and "write to all local authorities to remind them of their statutory duty to ensure that if providers charge for any goods or services, this is not a condition of children accessing their free childcare place".
Meg Hillier MP, Chair of the PAC, said:
"Government will soon trial the extension of free childcare and it must learn quickly from this experience if families are to properly benefit from the full roll-out.
Parents need to be able to access a sufficient number of providers, of sufficient quality. The Government must implement measures to assure this.
We are particularly concerned that the economic realities of providing childcare will deter providers from offering the extended provision.
Evidence suggests this would most affect families from disadvantaged areas, which is doubly concerning given the already disappointing take-up of funded places for disadvantaged two-year-olds.
The Government must take responsibility for identifying the reasons for this and take remedial action.
This needs to be in tandem with tackling weaknesses in the current system, in particular obstructions to parents taking advantage of the help and services available.
It would be a grave mistake to extend this policy on shaky foundations and we expect the Department for Education to respond swiftly to the concerns set out in our Report.
Taxpayers must be assured their money is being spent wisely and as a priority we urge the Government to explain exactly how it will measure value for money of the current and extended entitlement."
The Department for Education has made significant progress towards ensuring all three and four-year-olds benefit from 15 hours of free early education and childcare, with 94% of three-year-olds and 99% of four-year-olds taking up a funded place in 2015.
However, take-up of free childcare for disadvantaged two-year-olds is significantly lower, with only 58% taking up a place in 2015. In addition, it is not clear how the Department's free childcare offer interacts with other government interventions to support families with the costs of childcare, and to support disadvantaged families.
Only 30% of parents are aware of free service
Parents remain confused about the free entitlement and how to access free childcare; half of parents with children under four are not sure what help they could get with childcare costs. The quality of the information provided by local authorities' family information services to parents varies significantly, and only 30% of parents are even aware of this service.
There is a risk that not enough providers will be willing to provide the additional 15 hours of free childcare that the Department will offer working families from September 2017.
The Department has the opportunity to test this in pilots commencing in September this year, but it will have little time to evaluate the results and implement any lessons learned before it rolls out the new entitlement.